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What Does NH Mean in CIBIL Score?

What Does NH Mean in CIBIL Score?

Last Updated : July 4, 2020, 2:14 p.m.

Credit Information Bureau of India Limited (CIBIL) TransUnion provides you a free credit score. And the score is calculated using the type of loan you borrowed, the credit request you made, and due payments. These factors determine your CIBIL score that ranges from 300 to 900 in India. But, what if it shows NH? If you have no borrowing history, CIBIL has nothing to determine your credit-worthiness, for which it shows the ‘NH’ also called ‘No History’ . Read the post and know how to get a loan with no credit history in India from a bank or NBFC.

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High Monthly Income

When your credit history is zero, the bank or NBFC won’t approve your loan request that easily. You need to convince the lender that you are creditworthy for the loan amount which you can prove with your monthly income. Provide your income details to the lender like salary slip, bank statement, ITR report, or Form 16.

Based on your income details the lender will set your loan limit and you can borrow the loan, by completing the application form and paying the necessary charges for it.

Maintaining a Salary Account for Long

Salaried maintaining their salary accounts with the lender can benefit from a pre-approved personal loan or credit card offer. However, the lender may want a long salary account relationship before handing you the loan.

Working in Top Corporates

Personal loans and credit cards can be approved for individuals working in top corporates even if they don’t have a credit history. Working in reputed organizations gives confidence to the lender about your stable flow of income.

Apply for a Loan Against Securities

If you don’t think that your income could help in instant approval, you can provide collateral to the lender to reduce the credit risk. The security can be your Fixed Deposit, Insurance policy, Property, land, Mutual Fund units, shares, bonds, etc. How security helps you borrow loans with ‘NH’ CIBIL score?

Your lender can claim the asset you provide in case of non-payment, so the borrowed loan can be compensated even if you don’t pay for it. It gives surety to the lender that the loan amount you borrow should be paid on time else your collateral could be seized.

Credit History Not Mandatory for Home Loans

When you apply for a home loan , the bank or NBFC won’t focus on your credit history. So, the NH assigned against your CIBIL score won’t affect your home loan application. A home loan can be borrowed based on your income, property value, down payment of the property, etc. The lender does check the credit report to decide on the interest rate. But not having it will not lead to the rejection of the home loan application. If you are planning to renovate, construct, purchase a house, apply for a home loan without worrying about the CIBIL score.

Add a Co-borrower

You can borrow an unsecured loan jointly too. The addition of a co-borrower increases your eligibility and you can borrow even if you don’t have a credit score. Add the co-borrower who has a good credit score and get approval for a loan.

Tips to Build Credit History

Above you saw the possibilities of getting loans without a credit history. But the importance of a good history cannot be discounted. It helps you in more ways than one. Let’s check out some of the tips that can help build a good credit score for you.

Pay Loan EMI or Credit Card Bills on Time

Make sure to pay the loan EMI or credit card bill on time so that it reflects well in your credit report and helps you build a good credit history over time. you can use payment methods such as ECS, NACH, or PDCs. Using these payment services, your EMI amount will be deducted from your bank account on or before the due date every month which ensures your credit builds gradually as the repayment proceeds.

Don’t Apply for Credits Too Often

Handing debts efficiently does help you build a good credit history . But applying for credits frequently can work against you. More applications will mean frequent hard credit enquiries, raising possibilities of CIBIL Score going down very fast.

Keep Your Credit Utilization Ratio Low

Try not to use the credit card for every single purchase . It is better if your credit utilization ratio is 30% or less. As it makes your credit bills low and keeps your option available to borrow a loan anytime without any existing burden on your income.

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